Secure income REIT has bought a portfolio of 55 Travelodge hotels for £196.2m – a 7% yield.
The hotels are spread across the UK and the portfolio has an unexpired average lease term of 27 years with no breaks.
The hotels have been bought from the consortium of investors that owns Travelodge – GoldenTree Asset Management, Avenue Capital Group and Goldman Sachs Group.
The purchase will be funded by a seven-year £60m loan from M&G, which is fixed at 2.75%. There was also a £140m placing of ordinary shares.
This marks the REIT, which specialises in long-term investments, the first major acquisition since the company floated in 2014.
In the first six months of the year, the company reported a 6.2% increase in EPRA NAV to 300.2p a share.
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